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Legal education changing due to the transformation of the U.S. legal services market

Elizabeth Chambliss is a Professor at the New York Law School (NYLS). She specializes in the empirical study of the legal profession, focusing on the organization and regulation of U.S. lawyers and the effects of globalization on the U.S. legal services market. Her most recent project is dedicated to the future of legal education and the emergence of new organizational models for law schools in the U.S. and abroad. Elizabeth came to NYLS from a four-year stint as the research director for the Program on the Legal Profession at Harvard Law School. While at Harvard, her research focused on the emergence of General Counsel in large law firms, and the implications of this professional role for law firm management and regulation. Starting July 1, 2013, Elizabeth Chambliss will be a Professor and Director of the Nelson Mullins Center on Professionalism at the University of South Carolina School of Law. Elizabeth was interviewed by Leo Staub.

Elizabeth, we see a significant transformation in the U.S. market for legal services. Does the regulatory framework for lawyers and law firms keep up with these developments?

No, it does not! Developments were, and still are, driven by strong market forces: changing demands from the clients (corporates and consumers) as well as technology. They have moved the market in many ways. Regulators in the U.S. are still struggling with the outcome of these changes. And since there is not one regulator but 50 in our country, striving to impose 50 different sets of rules on lawyers and law firms, it is not an easy task to adapt the regulatory framework to new requirements. In the coming years, however, US regulators will face increasing pressure to rethink the boundaries of monopoly regulation in both the global, corporate market and the domestic (especially consumer) market, so I predict that the pace of regulatory change will increase.

Where do you see special needs for action from the regulatory side?

Some of the most important questions concern the lawyer’s special role as a fiduciary of the client, and how US lawyers’ traditional fiduciary duties apply in international and multiprofessional contexts. The role of technology, too, presents special questions. For instance, should legal software designers and producers be bound by fiduciary duties to consumers?

In your recent work you concentrate on how law schools should react to the new reality in the legal world. What happens here?

Since the late 1980s, US law schools generally have been primarily oriented towards the training demands of large, corporate law firms and have competed for students and faculty and rankings based substantially on their share of this market. Now, though, the „bespoke“ corporate legal services market is contracting and law schools need to prepare for a future where big law firms will not be able to absorb so many law graduates. In the US, perhaps only 10-15 law schools can expect to continue to primarily serve the high-end corporate market. Thus, law schools generally face increasing pressure to gear future training to additional and emerging markets, including not just law firms but other service providers, and legal start-ups. Entrepreneurial skills are likely to become more important, as well as training in computer science, engineering and design.

Why are law schools reluctant to fill this gap in legal education?

Young law graduates taking on a job with a mid-range law firm or an LPO will not make as much money as their peers who get hired by high-end law firms. This means that they are not able to pay for an overly expensive legal education. So, for law schools serving this market it will mean lower tuition revenues. This may be one reason why they are hesitant to move. In addition to that, many law schools may not have realized the need for strategic change yet. To them it is not clear which lawyerly skills will be required in these second and third tier segments of the market. However, things are moving fast, and it is not always clear where we are heading. Just waiting, though, will not bring any relief. Being innovative, trying new ways and taking risks will more likely be the right answer.

In a market where major shifts are still under way it is not easy to redefine a law school’s strategy indeed. Could you come up with a suggestion?

One way in order to find a profile different from others could be focusing on content. There are already law schools who, otherwise rather small and not among the most prestigious ones, have generated specialties that give them an extraordinary profile. Why not pick one or two legal disciplines and try to aim for the top such as IP-law, labor law or tax law? These graduates would fit just fine in mid-range law firms who try to provide full services to their clients, and are organized in practice groups. If the respective law schools would add special knowledge on local and regional laws these graduates would be of great value to hiring law firms.

And what about the legal commodity services providers? How would you shape a legal education to satisfy their needs?

It could be a great opportunity for a law school to – in addition to offering courses for paralegals – create courses designed to boost the skills necessary to successfully work for an LPO. Project management, management accounting, IT-operations, database design, procurement know-how, process design etc. are skills not taught in most law schools so far. However, they will be needed in LPOs. A sound legal education combined with such process and technology skills could be the way to a very attractive and, up to now, unique profile in the market for legal education.